European cars coming to the United States will be levied with additional taxes, according to US President Donald Trump.
“We’re going to put a 25 percent tax on every car that comes into the United States from the European Union,” Trump said at a campaign rally in West Virginia.
Trump first warned about possible tariffs on European cars in May. He asked the Commerce Department to examine whether such imports are threats to national security, using a similar argument to impose tariffs on steel and aluminum imports.
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The price of a new car could jump by between $1,400 and $7,000 for top-selling models if the tariffs are implemented, according to the Peterson Institute for International Economics report in July. The highest price jump would be seen in sales of luxury cars like Mercedes-Benz GLC-class, with 100 percent foreign content. Its price could increase from $36,846 to more than $45,400.
It is unclear, though, when the tariffs would come into force. Earlier Tuesday, in an interview with the Wall Street Journal. Commerce Secretary Wilbur Ross said the ongoing negotiations with the EU, Mexico and Canada are delaying the tariffs. The newspaper added that the Commerce Department is studying the issue, and its recommendations are not ready yet.
The US imported more than $200 billion in foreign cars and trucks last year, of which almost 80 percent came from Mexico, Canada, Japan and Germany. Foreign car companies like BMW and Toyota are large employers in the US.
Auto firms have said tariffs would lead to less investment in the US and job cuts. According to the Peterson Institute for International Economics, even without retaliation, car tariffs could lead to the loss of 195,000 US jobs.
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